Software company Freshworks has announced that it plans to cut 11% of its global workforce, or roughly 500 jobs, as rapid advances in artificial intelligence (AI) push the tech sector toward automation-driven profitability. The layoffs are expected to affect its operations in both India and the US.
Freshworks is a cloud based Software as a Service (SaaS) company founded in 2010 in Chennai, Tamil Nadu. It provides tools for customer relationship management, IT service management and e-commerce marketing. Freshworks was one of the first Indian SaaS companies to be listed on Nasdaq.
The announcement comes as the tech sector grapples with layoffs in the US and around the world, including in India.
The curse of AI: an $8 million restructuring
As of December 31, 2025, the company had nearly 4,500 full-time employees. The restructuring is expected to cost the company about $8 million in one-time charges. The bulk of the restructuring costs will be recognized in Q2 2026, Freshwork CFO Tyler Sloat said during the company’s Q1 earnings call on May 6.
Meanwhile, CEO Dennis Woodside said the layoffs were partly due to the use of artificial intelligence in products and engineering, as well as the automation of routine work across the business.
“More than half of our code is written by artificial intelligence,” Woodside told Reuters, adding that automation has reduced “the back-end work that technology can take care of.”
He added that savings from merging sales teams, reducing management levels and automating work will be reinvested in Freshworks’ Employee Experience business, which includes its Freshservice IT management software.
An existential threat to tech
At the same time, artificial intelligence tools from Anthropic and others have emerged as potential existential threats to traditional software makers, hammering shares of companies from Freshworks to larger rivals like Salesforce and ServiceNow.
According to layoff.fyi, an independent real-time job loss tracker, more than 93,200 tech workers have been laid off so far in 2026. For comparison, 124,201 technical employees were laid off for the entire year 2025.
Separately, Freshworks said it expects second-quarter revenue of between $232 million and $235 million, the midpoint above analysts’ average estimate of $232.7 million, according to data compiled by LSEG.
In the first quarter, revenue rose 16% to $228.6 million, compared with estimates of $223.24 million. Adjusted earnings came in at 11 cents per share, missing estimates of 12 cents.
